Kuwait set to have record year: expert – Over $30 bln worth of awarded contracts despite falling oil prices

25/11/2015

KUWAIT CITY, Nov 24: The MEED Kuwait Projects 2015 conference kicked off today at the Regency Hotel, organised with the support of the Ministry of Electricity & Water (MEW), Ministry of Health (MOH), Kuwait Authority for Partnership Projects (KAPP), Public Authority for Housing Welfare (PAHW), Kuwait Direct Investment Promotion Authority (KDIPA) & the Kuwait Society of Engineers (KSE). In its 11th Edition, the Kuwait Projects conference focuses on the country’s $230bn+project pipeline, with an up-close focus on the mega-projects shaping Kuwait’s landscape; and spanning the PPP sector, healthcare, housing, power & water and large infrastructure projects. With $30bn worth of projects awarded by the state this year, Kuwait has become the second largest projects market in the region, especially in light of the roughly $137bn worth of projects currently in pre-execution stage and the $230bn+worth of projects in the pipeline overall.

One of the key topics of discussion during the first day was Kuwait’s newly reformed public-private partnership (PPP) body — the Kuwait Authority for Partnership Projects (KAPP) — which experts have said KAPP is poised to become a major force in Kuwait’s projects market, and one of the most active clients in this area throughout the region. This past year, KAPP made major progress with a number of landmark mega projects that are set to change the face of Kuwaiti’s economic landscape over the next decade. In his keynote speech, Adel Al- Roumi, General Manager of KAPP, said that rather than slow down the PPP market, the recent decline in oil prices only served to boost this sector, with many turning to these projects in an effort to diversify economic activity and source of income. He said that with the success of its inaugural PPP project, Al-Zour North independent water and power project (IWPP), KAPP is moving ahead a $30bn+program.

Tendered
Al-Roumi pointed out that many of these projects such as Al-Khiran IWPP, Umm al-Haymann wastewater treatment project and the Kabd Municipal Solid Waste Treatment Centre — have already been tendered, whilst others such as the metro and railroad projects are set to be tendered by next year. He also added that KAPP is very keen on developing health and education projects. One thing that Al-Roumi was quick to point out was that there is still a big learning curve when it comes to the PPP market in Kuwait, adding there is a major need for educating both the private and public sectors about the role and function of KAPP within the country.

On his part, Ed James, MEED Projects’ Director of Content & Analysis said: “Kuwait is entering a new era for projects development. This is a very exciting time for the projects market in Kuwait, as the country is pressing ahead with an aggressive plan. While other countries are reducing their capital expenditure levels due to falling oil prices, Kuwait is set to have a record year, with more than $30bn worth of awarded contracts. This acceleration in project activity will continue into 2016 thanks to the emphasis on PPP projects in the state.

After years of underperforming, the state is now leading the way in involving the private sector in project development from sectors as varied as power and water to schools and real estate. These mega projects are no longer theoretical and abstract notions, but are firmly moving from the realm of concept to the realm of reality, and as a result are seeing a level of interest in the local projects market that is unlike anything we have ever seen before. All in all, there has never been a better time to be involved in the Kuwait projects market.”

Over 200 senior level attendees from both the public and private sector took part in the two-day conference, which feature over 35 speakers, including: Faisal Al-Gharib – Deputy Minister at the Central Tenders Committee, Adel Al Roumi – General Manager at the Kuwait Authority for Partnership Projects, Dr Meshaal Jaber Al Ahmad Al Sabah – Director General at the Kuwait Direct Investment